CICP Innovation Metrics Analysis

Author

Riley Hudelson-Zipper

Published

October 23, 2025

1 State R&D Performance

Indiana’s research and development activity is a critical driver of innovation and advanced industry competitiveness. This section examines R&D value added, employment, and compensation using data from the Bureau of Economic Analysis R&D Satellite Account.

1.2 Regional R&D Comparison

How does Indiana’s R&D intensity compare to neighboring states?

R&D Value Added by State (2023)

1.3 R&D Employment Comparison

R&D employment captures the workforce dedicated to research and development activities across the region.

R&D Employment: Indiana and Neighboring States (Indexed to 2012)

R&D Employment (in Thousands of Jobs) Summary by State (2012-2023)
geography 2012 2023 Total Growth CAGR
United States 2,427 3,243 33.6% 2.7%
Indiana 51 55 7.8% 0.7%
Michigan 100 130 29.4% 2.4%
Illinois 98 109 11.6% 1.0%
Ohio 81 89 9.6% 0.8%
Kentucky 17 14 -15.3% -1.5%

1.4 R&D Compensation per Worker

Examining compensation per R&D worker reveals the economic value and competitiveness of R&D employment across states.

R&D Compensation per Worker by State (2023)
State Total Compensation Employment Compensation per Worker
United States $603,763.9M 3,243K $186,152
Illinois $17,550.2M 109K $160,422
Michigan $19,933.0M 130K $153,923
Indiana $7,943.6M 55K $144,167
Ohio $10,648.3M 89K $119,913
Kentucky $1,445.5M 14K $100,382

R&D Compensation per Worker by State (2023)

1.5 R&D by Sector

Breaking down R&D activity by manufacturing vs. nonmanufacturing sectors reveals concentration patterns.

R&D Value Added by Sector Over Time - All States

R&D Value Added by Sector - Indiana

⚙️ Sector R&D VA Insights

Indiana’s Manufacturing R&D Dominance:

  • Manufacturing accounts for 81% of Indiana’s total R&D value added (vs. 19% nonmanufacturing), reflecting the state’s strong industrial base
  • Indiana’s manufacturing R&D grew 85.1% from 2012-2023, while nonmanufacturing R&D grew 91.2%

Regional Comparison:

  • Michigan (71% mfg) and Indiana (81% mfg) show the highest manufacturing R&D concentration among neighbors
  • Illinois has the most balanced R&D portfolio (49% mfg, 51% nonmfg), reflecting its diversified economy with strong services sectors
  • Ohio presents a notable contrast: its nonmanufacturing R&D has nearly converged with manufacturing, driven by 139.5% nonmanufacturing growth vs. 8.0% manufacturing growth

Strategic Implications for Indiana:

  • Ohio’s convergence demonstrates that even manufacturing-intensive states can diversify their R&D portfolios through investments in technology services, healthcare innovation, and other knowledge-intensive sectors
  • Indiana’s persistent and widening gap suggests potential vulnerability to manufacturing sector disruptions and missed opportunities in high-growth nonmanufacturing R&D fields
  • The state may benefit from targeted initiatives to strengthen R&D in emerging sectors like software, data analytics, healthcare technology, and professional services to create a more resilient innovation ecosystem

1.6 Regional R&D Share Analysis

Understanding Indiana’s position relative to the broader Midwest R&D ecosystem.

State Share of Regional R&D Activity (2023)
State R&D Value Added Share of 5-State Region
Michigan $23,077M 34.4%
Illinois $20,206M 30.1%
Ohio $12,632M 18.8%
Indiana $9,545M 14.2%
Kentucky $1,649M 2.5%

1.7 R&D Value Added by Detailed Industry

Breaking down R&D by specific industries reveals concentration patterns and growth dynamics within the broader manufacturing and nonmanufacturing categories.

1.7.1 Manufacturing R&D by Industry

Manufacturing R&D Value Added by Industry - Indiana and Neighboring States (2023)

Manufacturing R&D Industries - Indiana (2023)
Industry R&D Value Added Share of Mfg R&D
Chemical manufacturing $4,052.5M 60.8%
Other manufacturing $1,827.6M 27.4%
Transportation equipment manufacturing $684.5M 10.3%
Computer and electronic product manufacturing $104.2M 1.6%

1.7.2 Nonmanufacturing R&D by Industry

Nonmanufacturing R&D Value Added by Industry - Indiana and Neighboring States (2023)

Nonmanufacturing R&D Industries - Indiana (2023)
Industry R&D Value Added Share of Nonmfg R&D
Professional, scientific, and technical services $1,064.5M 66.3%
Information $425.1M 26.5%
Other nonmanufacturing $116.9M 7.3%

1.7.3 Government and Higher Education R&D

Government and university R&D represent critical components of the regional innovation ecosystem, supporting basic research and workforce development.

Government and Higher Education R&D Value Added Over Time (Indexed to 2012)

Note: “Higher Education” includes public and private nonprofit colleges and universities. “Government” includes federal, national defense, nondefense, and state and local governments.

Government and Higher Education R&D - All States (2023)
State Government R&D Higher Education R&D
United States $61,749.7M $58,372.3M
Indiana $1,013.3M $945.3M
Illinois $1,009.0M $2,575.1M
Kentucky $513.9M $428.0M
Michigan $1,889.5M $1,815.8M
Ohio $1,994.0M $1,348.8M
🎓 Government and Higher Education R&D Insights
  • Indiana’s government R&D totaled $1,013.3M in 2023, growing 74.2% since 2012
  • Higher education R&D reached $945.3M in 2023, with 69.3% growth (vs. 65.9% nationally)
  • Among neighboring states, Indiana ranks 3rd in government R&D value added and 1st in growth rate (74.2%)
  • For higher education R&D, Indiana ranks 4th in total value and 1st in growth (69.3%) among the five-state region
  • University R&D is essential for basic research, workforce development, and technology transfer to industry
  • States with strong university R&D systems often see spillover benefits in commercial innovation and startup formation

1.8 Key R&D Insights

Overall R&D Performance:

  • Indiana’s R&D value added grew 84.6% from 2012 to 2023, reaching $9,545.0M
  • Indiana ranks 4th among the five-state region in total R&D value added
  • Indiana accounts for 1.36% of U.S. R&D value added, 1.70% of R&D employment, and 1.32% of R&D compensation
  • 55,100 workers were employed in R&D activities across Indiana in 2023

Sector Composition & Dynamics:

  • Manufacturing R&D dominates at 81% of Indiana’s total R&D value added, reflecting the state’s industrial heritage
  • Manufacturing R&D grew 85.1% (2012-2023) while nonmanufacturing R&D grew 91.2%—the gap is slightly narrowing
  • Chemical manufacturing is Indiana’s largest manufacturing R&D industry at $4,052.5M in 2023
  • Compared to Ohio’s balanced R&D portfolio, Indiana’s persistent manufacturing dominance creates both competitive advantages in industrial innovation and vulnerability to sector-specific disruptions

Government & Higher Education R&D:

  • Government R&D totaled $1,013.3M (74.2% growth) and higher education R&D reached $945.3M (69.3% growth) from 2012-2023
  • Indiana ranks 4th among neighboring states in higher education R&D value added
  • Public sector R&D — particularly university research — is critical for basic research, talent development, and technology transfer that supports private sector innovation
  • States with robust university R&D ecosystems typically see stronger startup formation and technology commercialization outcomes

1.9 Data Notes

Key definitions from BEA R&D Satellite Account:

  • Value Added: The contribution of R&D activities to GDP
  • Employment: Full-time equivalent jobs in R&D activities
  • Compensation: Total wages, salaries, and benefits for R&D workers
  • Five-State Region: Indiana and its neighboring states (Michigan, Illinois, Ohio, and Kentucky)

See the full technical notes from BEA for detailed methodology.